Relief and fear at spending plan

Published Thursday 21 October 2010 3:39 pm

Chancellor George Osborne’s comprehensive spending review has been greeted with a mixture of relief and fear by logistics industry groups.

Several road and rail projects were approved for progress in the review, and the FTA which has campaigned to protect investment in key transport infrastructure projects, has heralded this as “a lifeline” for the UK’s economic future.

James Hookham, FTA’s managing director policy and communications, said: “We are encouraged with Osborne’s declaration of support for transport projects and it is good news that many of the tyrade routes that FTA identified to transport ministers as priority projects demanding further investment have been protected.

“While we have yet to learn the full details of other road and rail projects it looks like the message has got through: for future growth to happen infrastructure is not an optional extra but an absolute essential.”

Ian Baxter, managing director of road freight operatorRH Group, was more circumspect. He said: “Today’s spending review actually revealed very little about how cuts will affect the freight industry. The £30 billion capital spending investment in transport will result in some road improvement projects going ahead but realistically we must wait until Phillip Hammond’s report to parliament next week to understand the details properly.”

Philippa Edmunds, manager at campaign group Freight on Rail, said “ We will be scrutinising the detail when it emerges to see whether the chancellor has been as good as his word in delivering the building blocks for the new green economy, by protecting key rail freight projects and spending in the comprehensive spending review to give industry the confidence to invest.”

The shop workers union Usdaw viewed the coalition’s economic policy as a threat to growth which could even return the UK to recession.

General secretary, John Hannett, said: “The speed and depth of the proposed cuts is both unfair and irresponsible… Over a million more jobs in both the public and private sectors are now under threat and yet there was virtually nothing in the Chancellor’s statement about how the government plans to secure the recovery and future economic growth.

“Consumer confidence is already down and following this review it is unlikely to recover quickly and I fear the government maybe pushing us into another recession.”

Accountants PwC predicts that the government will have to consider user charging schemes.

Richard Abadie, partner, PwC said: “Such a drastic fall in public revenues flowing into infrastructure will inevitably force the debate on user charging, which is common in several European countries but which the UK has traditionally not adopted. There is likely to be serious consideration of user charging, not only for roads, bridges and tunnels, but also for additional energy infrastructure.

The spending review included provision for funding adult apprenticeships will be increased by £250 million per year by 2014-15. The chief executive of the CILT, Steve Agg, said: “We are pleased that the Government has listened to our views and acknowledged the need for a skilled workforce. We now look forward to seeing some of this money being ring-fenced for passenger and logistics apprenticeship schemes and will be making further representations to the Department for Business to ensure this happens.”

The logistics sector skills council Skills for Logistics says that employers should grasp the chance to take on some of the additional apprenticeships that will receive funding as set out in the review.

Chief executive Dr Mick Jackson said: “The CSR has changed the way that training will be provided and accessed. The Government is anxious to encourage a balance between public and private investment in training and skills development and apprenticeship schemes, such as those we provide in the logistics sector, achieve that balance.”